Sub-Saharan Africa Growth Lowest in 20 Years

IMF Blog, October 26, 2016

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The IMF's latest regional economic outlook for Sub-Saharan Africa shows growth at its lowest level in more than 20 years.
The region exhibits a "multispeed Africa, with multispeed growth."
The three largest countries in the region—Angola, Nigeria and South Africa—face acute economic imbalances due to governments not taking steps to cope with the drop in export earnings from low commodity prices, notably oil.
Countries such as Cote d’Ivoire, Senegal, and Tanzania continue to grow at 6 percent or more.
The report characterizes the region as going through a difficult period, while African Department Director Abebe Aemro Selassie expresses optimism about the future if countries pursue the right policies.

Hardest hit: Oil-exporting and commodity-dependent economies (explicitly noted: Angola, Nigeria, South Africa).
Strong performers: Cote d’Ivoire, Senegal, Tanzania (growth at 6 percent or more).
Primary driver of strain: Drop in export earnings due to low commodity prices, notably oil.

Reallocate public spending to improve fiscal resilience.
Change tax systems to mobilize government revenues and help reduce deficits.
Eliminate fuel subsidies, while ensuring the burden on the poor and vulnerable is not increased.
Invest in infrastructure and in the development of people through education and health care.
Use technology, including financial technology, to expand banking access and enhance productivity.

Technology has huge potential to help large parts of the region that remain underbanked.
Financial technology can make money transfers cheaper and more secure and can enhance productivity.

Source: iMFdirect, October 26, 2016 — interview with Abebe Aemro Selassie summarizing the IMF regional economic outlook for Sub-Saharan Africa.